Rupert Murdoch (pictured left), chairman of the media conglomerate whose British newspapers include the Sunday Times and the Sun, said that he "can't promise" that he'll meet his own deadline. The media magnate did not give a reason for the delay, but said that "we are all working very hard" on delivering the pay solution Rupert Murdoch, the chairman of News Corp, gave no reason for delaying plans to charges online readers of his newspaper websites. The surprise answer came during a conference call to discuss the company's first-quarter results, not least the dramatic fall in operating income in its newspaper division, falling to $25m in the three months to September from $134m in the same period a year ago. In the UK, News International, publisher of The Times and the Sun among others, saw advertising sales fall by 15% and circulation sales by 6%. Even at the flagship Wall Street Journal advertising fell, although the slump here was offset by an increase in price at the business newspaper which Mr. Murdoch said remains "barely profitable". It is known that work is in progress for a separate website for the Sunday Times – whose content is currently housed on The Times' site – which was likely to be the test-bed for his charging mechanism, details of which remain scant. In television, the picture was similar, with the division making operating income of $38m in the first quarter, against $83m in the same period last year. – The Register
Dominant Social Theme: Nothing to see here folks ... move along!
Free-Market Analysis: We have written numerous times that the mainstream media has its work cut out competing with the Internet, in the West anyway. Murdoch certainly knows it, and he is perhaps the most adept and realistic media mogul out there. He is a tough man and a real genius, in our opinion. Years ago he was sounding a warning about the Internet and it has been fun – (well, that's cruel) – it has been "interesting" to watch him flail around, trying to do anything to postpone the inevitable. (For a while, he was buying social networks for goodness' sake!)
Poor multi-billionaire! ... Nothing much has worked, at least not to the degree that Murdoch needs it to work. Nothing has postponed the ... inevitable. And what's that? That the hundreds of billions in sunk costs – in TV, radio, newspaper and magazine presses – to which Murdoch committed himself and his investors are gone a-glimmering, like so much dust in the wind.
One day Murdoch woke up on silk sheets in a large bedroom (with all the modern appliances) with his beautiful, politically connected Chinese wife and controlled an impregnable media empire. He WAS the voice of the West, if only because no one else could afford the kinds of insane brick-and-mortar his shadowy backers were willing to fund. The next day ... pffttt. He must have had a headache on that day. He is really smart, and reality probably hit him all at once, maybe at breakfast. He probably had another cup of coffee. Or perhaps he lost his appetite.
We, as much as anybody in the business, are interested in how Murdoch is going to make his vast, sagging media empire pay for itself. Whatever problems Murdoch has are squared, tripled or quadrupled, at other media groups. But if Murdoch pulls it off, then they may have a chance as well.
But we repeat. It is a hard deal to sell news in an era of news plenty. Murdoch and all the others were better off in the 20th century, an era of purposeful news scarcity. Additionally, all the deals that Murdoch (others, too) has made with host governments around the world means that Murdoch publications simply can't "tell it like it is." The tiny flotsam and jetsam on the Internet can indeed, and do, and will continue to do so. Thus, they will continue to gain audience share at the expense of Murdoch's vast, lumbering, expensive and often untruthful media.
We just wrote about a fairly crazy article that appeared in one Murdoch publication (are there any he doesn't own?) the Wall Street Journal (see yesterday's Bell). This is the kind of thing that is a credibility killer, in our humble opinion. Over time, repeated and repeated, it bleeds you to death. And because the Internet provides a constant counterpoint, it is bleeding the Murdoch empire, and others as well.
Of course maybe it would be easier just to outlaw the Internet. (Don't think that blunt remedy hasn't occurred to some!) But it's not all that easy to bash a cutting-edge technology. (The Church apparently tried to license every book being printed during the Gutenberg era, but that didn't work so well either.) If Western governments try to crack down hard some Steve Jobs type will come along in a garage and figure out how to send Internet signals through the ground or something. (Anyway, we think the Internet is destined for a longer run than the doomsters do.)
Conclusion: We confess to being partial about Murdoch. He's a deal guy, but he "gets" media and it is interesting to see such a sharp mind grapple with such an insoluble problem as he faces. Maybe he will figure it out. That will make our job harder of course, but that's the free- (or not so free) market for you! So we'll see ... In the meantime, we have one word for Murdoch as he struggles with the complexities of pay-per-view during the Internet age. Porn.
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